Labor-Market Quality
of Foreign-Born Workers
2007-2017

Rubén Hernández Murillo

FDIC — May 13, 2022

(Federal Reserve Bank of Cleveland Economic Commentary, May 2020.)

Goals

• The foreign-born are (very) important for the US economy
• Data from the ACS on labor-market quality between 2007 and 2017
• Various measures of labor-market quality improved over the period
  • Notable increases among Mexican-born workers
• Why?
  • Shift in the composition of the foreign-born
    • Increase in immigration from Asia
    • Precipitous decline in immigration from Mexico (why?)

The foreign-born are very important

• Most of the foreign-born population are working-age individuals
  • The foreign-born represent almost 20% of the US workforce
• The foreign-born population grew 2.5x to 3.3x faster than the US-born
  • Overall US population grew 8.2%:
    • 2.2% was growth in the overall foreign-born population
    • 6.1% was growth in the overall US-born population
  • Working-age US population grew 5.7%:
    • 2.2% was growth in foreign-born workers
    • 3.5% was growth in US-born workers

Measures of labor-market quality

• Educational attainment
• English proficiency
• Earnings potential

Educational attainment by area of origin

English proficiency by area of origin

Median annual earnings relative to
US-born workers by area of origin

Distribution of the recent foreign-born
by area of origin

Border enforcement

Conclusion

• Measures of labor-market quality of foreign-born workers
  improved during 2007-2017
• Notable gains seem concentrated among immigrants from Mexico
• The apparent increase in quality results from
  a shift in the distribution of immigrants:
  • Increased immigration from Asia
  • A precipitous decline in immigration from Mexico
• Factors behind the decline in immigration from Mexico:
  • Increase in border enforcement over past two decades
  • (Decrease in US demand for Mexican workers after 2008/9 recession)